KEY HIGHLIGHTS:
- Average home prices rose 8.92% in the past year to an average of Rs 6,298 per sq ft in June 2024, a lifetime high
- Rates increased 19.95% over 24 months and 28.06% over 36 months
- Projects under development grew 9.61% from a decadal low of 2,227 in June 2023
- The increased inventory and prices have pushed the unsold inventory value to Rs 61,849Cr from Rs 49,423Cr
- Demand for larger homes persists. Three-bedroom units account for 27% of new launches, reflecting a shift of consumer preferences towards larger-sized homes.
- The PremiumPlus segment witnessed the maximum price rise with a 5-year CAGR of 7.58%, reaching Rs 8,310 per sq ft in June 2024
- Excess supply or inventory (inventory overhang) improved in the Value and PremiumPlus segments, with an overall market average of 9.68 months (from 8.7 months in June 2023)
- Yearly new launches increased by 5.8%, with PCMC accounting for 42%. Ready- and near-ready inventory is at a 10-year low, with 3,384 apartments available, and constitutes 4.5% of the total unsold inventory
- Home affordability is at 3.98x annual income, empowering buyers to purchase from branded developers, and pay a premium for reputation and track record
Pune | July 5, 2024: Gera Developments Private Limited (GDPL), pioneers in Real Estate business, and award-winning creators of premium residential and commercial projects in Pune, Goa, and Bengaluru, released the July 2024 edition of their bi-annual report titled, “The 13th Gera Pune Residential Realty Report”. It is based on primary and proprietary research conducted by GDPL, and covers all existing projects in a 30-km radius of the city centre. The report is an outcome of over a decade of research, and is the longest-running, census-based study of the residential markets of Pune.
According to the latest edition of the report, for the period of Jan to June 2024, the rise in home prices has impacted affordability, but is driving buyers to more reputed developers. The fall in Sales Volume, combined with the rise in Inventory Overhang has put a slight pressure on sales momentum, indicating the need for a balanced approach towards the marketplace.
Between June 2023 and June 2024, the number of under-construction projects in Pune rose, as did the average project size over the past decade. Projects under development show significant increase of 9.61% after a 10-year low in June 2023. As of Jun 2024, there are 3,12,748 apartments under development across the Pune region. This is an increase of 2.65% over Jun 2023, when the apartments under development amounted to 3,04,688 units. The average size of projects has increased by 44% – from 89 apartments per project, up to 128 apartments per project, over the decade between Jun 2014 to Jun 2024.The data also points towards the continuing trend of preference for larger homes, with developers launching homes sized at an average of 1,238 sq ft.
Speaking on the findings of The 13th Gera Pune Residential Realty Report July 2024 edition, and the latest trends in Pune’s residential real estate market, Mr. Rohit Gera, Managing Director, Gera Developments Private Limited, said, “While the real estate market continues to show performance, the increase in prices of homes by 8.92%, coupled with the increase in home sizes driven by 1,400+ sq ft homes, is starting to affect customer affordability. Affordability has gone down to 3.98x annual income while 5 years ago affordability was 3.79x annual income in Jun 2020. Clearly, we are seeing pressure on affordability though it’s nowhere close to the peak of 5.30 and continues to remain good at present. This shows up in the sales volume having come down by 3.6% compared to the last 12 months. The replacement ratio of 1.05 indicates that the quantum of new supply is greater by 5% compared to sales.”
Mr. Gera further added, “On the other hand, the preference for near-ready and ready inventory is a sign that the market is leaning towards a low-risk delivery – a characteristic of developers with a strong brand, also driving the capacity of reputable developers to launch large projects. This reiterates the continued trend of market consolidation. The increase in inventory overhang years from 8.7 months from Jun 2023 to 9.7 months in Jun 2024 indicates a little pressure on overall sales momentum throwing caution to the wind.”
Here are the key highlights of the 13th Gera Pune Residential Realty Report, encompassing trends from Jan 2024 to June 2024:
#1: Projects under development surged by 9.61% since June 2023; Inventory Value now at Rs 61,849Cr.
#2: Inventory Available for Sale increases by 7.3% to 75,598 units; highest growth in prices of homes in new projects
#3: Highest growth in prices of homes in new projects; homebuyers attracted most to PremiumPlus segment
#4: Yearly new launches increase by 5.8%; PCMC accounts for 42% of all new launches in Pune
#5: Units sized 1,000+ sq ft witness a 12% sales growth
#6: Consumer preference for bigger developers with a strong brand continues
To conclude, sales volume has also come down by 3.6% compared to the last 12 months. While the Replacement Ratio stands at 1.05—indicating the quantum of new supply being greater by 5% compared to sales—the Inventory Overhang has improved significantly in the PremiumPlus (from 16.26 months in 2018 to 7.23 months in 2024) and Luxury segments (from 20.59 months in 2018 to 10.22 months in 2024).
Prices continue their stellar runup in the last 12 months impacting affordability to go down to 3.98x annual income. Although the pressure on affordability is nowhere close to the peak of 5.30, homes continue to remain accessible to most buyers.
About The Gera Pune Residential Realty Report:
The Gera Pune Residential Realty Report is a bi-annual initiative by Gera Developments Private Limited (GDPL) in its 13th year of operation, aimed at garnering insights on both, the supply and demand sides of the residential realty market in Pune. This longest-running, census-based study uses a feet-on-street methodology of data gathering, and covers the Pune Urban Agglomeration area. The data is validated, and statistically analysed. What started as a knowledge-gathering initiative in 2011, has now become something that realtors, IPCs, Research Houses, Brokerage Houses, and Banks & Financial Institutions look forward to. Besides a broad overview of available inventory, consumer affordability, and offtakes and prices, the report dives deeper to mine insights by price segment, square footage, construction stage, and size of unit.
About Gera Developments Private Limited:
GDPL, a reputed brand for over 50 years, is one of the pioneers of the Real Estate business in Pune. Recognised as the creators of premium residential and commercial projects in Pune, Goa, and Bengaluru, the brand has established a global presence through developments in California, USA.
Please visit www.gera.in for more information
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